Organized as a for-profit business. The only not-for-profit companies eligible for SBA 504 loans are sheltered workshops.
Legal entity-corporation, partnership, sole proprietor, limited liability company.
Any type of legitimate business- manufacturing, wholesale, service, professional service or retail.
Located in or planning to locate in any area of the United States.
Small business - either: net worth under $7 million & net profits after taxes under $2.5 million or meet SBA's other size standards (by sales or number of employees depending on NAICS code).
Planning to use the loan proceeds for capital investment (land, building, leasehold improvements, renovation, construction, machinery & associated soft costs). The SBA 504 loan program is not a working capital program. See uses of loan proceeds section for more details.
Another lender must be willing to participate in the financing. The SBA 504 loan finances up to 40% of the total project cost and the other lender finances 50%. The business or its owner typically puts in 10%. Economic development goals must be achieved through the project being financed. See section on economic development requirements.
Owner-user of the project being financed (51% occupancy if existing building; 60% occupancy if new construction) Two or more unrelated small businesses may receive a 504 loan to buy or construct a building as long as they, together, will occupy at least 51% an existing building or 60% of new construction.
Companies that are not eligible for SBA 504 loans are: not-for-profit businesses (except sheltered workshops); businesses engaged in lending (such as banks, finance companies); passive holders of real estage and/or personal property; life insurance companies -- however an insurance agency is eligible;) businesses located in a foreign country or owned by aliens; businesses selling through a pyramid plan; illegal businesses; businesses which restrict patronage; government owned entities (excluding Native American Tribes); businesses engaged in promoting religion; consumer and marketing cooperatives (producer cooperatives are eligible); businesses engaged in loan packaging; businesses owned by persons of poor character; equity interest by lender, CDC or associates in applicant concern; businesses providing prurient sexual material; businesses that have previously defaulted on a Federal loan; businesses engaged in political or lobbying activities; and speculative businesses.
Acquisition of vacant land for construction of a building
Acquisition of land and building
Leasehold improvements
Renovation of building; addition to building
Construction of a building
Acquisition of a commercial fishing vessel or party boat
Acquisition of heavy duty machinery & equipment (such as printing press)
Associated soft costs: title searches & insurance; attorneys fees; appraisals; environmental reports; architects; permits;surveys; installation of machinery; points on bridge loans, small amount of furniture and fixtures, etc.
Not permitted are mortgage broker fees; points on permanent financing;moving expenses.
Refinancing is not permitted except to take out financing on property acquired within last 9 months with interim funds.
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Eligibility
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